Can anybody tell what is the link b/w reporate and
inflation? How these parameters vary???
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Answer Posted / sumbul
when the Central Bank of any country increases their repo
rate ( the rate at which banks borrow from the central bank)
it eventually makes the other banks of the country increase
their prime lending rates (PLRs). when the PLRs increases
the people borrow less from the banks which leads to
reduction in demand which inturn ultimately helps in curbing
the rising inflation.
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